Achieving stable, strong and virile exchange rate in Nigeria would require full participation of Bureaux De Change (BDCs) in the retail segment of the foreign exchange (forex) market, President, Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji (Dr) Aminu Gwadabe, has said.
According to Gwadabe Nigeria has, under the current leadership at the Central Bank of Nigeria (CBN), all it takes to achieve a strong and stable exchange rate and build a highly liquid forex market that supports the domestic economy.
He said the challenges confronting the nation’s forex market and depreciation of the naira require all hands to be on deck, and the BDCs, which are licensed to play at the retail end of the forex market, should be fully involved in providing lasting solution to the ongoing volatility in the exchange rate.
Gwadabe said the continuous depreciation of the naira in both official and parallel markets does not benefit the BDCs and the domestic economy, hence steps should be taken to reverse the trend and strengthen the local currency for maximum impact on the economy.
The local currency, last week, hit a new low trading around N1,150/ $1.0 in the parallel market and average of N860/ $1.0 in the official windows, due to persistent dollar scarcity and speculative activities of illegal forex dealers.
He said the several measures by the apex bank to bridge exchange rate gaps showed genuine intentions of the regulator to entrench exchange rate stability, but getting the BDCs involved in the solution recipe will bring the desired results of not only a highly liquid market, but stable rates.
Gwadabe said that like every other segment of the market, the illiquidity in the market remains a major concern to the BDC sector. He said aside illiquidity in the market, the ABCON is not happy with the unlicensed forex dealers who are at the centre of speculative activities, and attracting negative image to the sub-sector.
He said ABCON can only continue to educate the general public against patronizing the illegal forex dealers because the suspension of the Self-Regulatory Organization status of ABCON makes it difficult for the group to directly sanction the illegal operators. According to him, enforcement of regulatory sanctions against non-compliance with guidelines are expected to be prompt and stiff against erring members as a deterrent to others.
Source: Vanguard
